by Lauren Aimes
Your friend recommended a financial advisor. You saw an ad for another financial advisor. You recognized the name of the firm of an older financial advisor. And you received a junk-mailer for an advisor who seemed nice and easy to work with.
Sure, this is one way to compile a list of financial advisors. But how do you create a list of the best financial advisors?
Here are some tricks.
Don’t Base Your Decision on Personality
Every advisor – or salesperson – that you talk to will more than likely claim to be a trustworthy financial expert. But the truth is that many won’t be telling the truth. Many salespeople who use the title “financial advisor” are undocumented. That’s because:
- There are no mandatory disclosure requirements to use this title.
- Salespeople can tell you what they want you to hear – and they can withhold what they don’t want you to hear.
- Investors don’t always think to ask for track records that document past performance.
- Many sales reps and insurance agents use sales tactics and undocumented claims to convince you they are ethical experts to make a sale.
- Investors don’t know how to validate the accuracy of an “advisor’s” claims.
To combat this, it’s crucial to look beyond a charming personality and ask the right questions.
- What services does an advisor provide?
- How are they compensated?
- What is an advisor’s experience and education?
- Are an advisor’s business practices ethical?
Investors also need to know what a good answer is (what will benefit them), and more importantly, what a bad answer is (what can be damaging to them).
Investors should also know that it’s actually easy to validate the accuracy of advisor information. While it may have been difficult in the past, the Internet has changed that.
When looking for a financial advisor, make sure to Google search the advisor’s name, check regulatory websites like FINRA, look for an advisor on social media and, of course, visit the advisor’s financial advisor website. If an advisor does not have a website, this may be a red flag.
Paladin Registry also offers many free tools to check a credential, verify an advisor’s experience and expertise and learn how an advisor is paid. Paladin’s free match service can produce a list of the best financial advisors based on an individual investor’s specific needs in just minutes. An investor simply inputs their requirements and by the next business day, a list of financial advisors is emailed to him or her.
Use a Local Advisory Firm
Just because you’ve seen an advertisement on TV does not make a big firm your best choice. In fact, often times, the opposite is true. Large firms typically have too many conflicts of interest – stockholders, CEOs and partners. A better choice is often a Registered Investment Advisory firm (RIA) that is headquartered in your community or an Investment Advisor Representative (IAR) who is registered with a local RIA.
Select a Fiduciary
When searching for the best financial advisors, make sure an advisor is willing to acknowledge whether he or she is a financial fiduciary in writing. Fiduciaries are held to the highest ethical standards in the financial service industry and, in general, produce better results. Investment salespeople on the other hand are held to a much lower standard.
Look for a Fee-Only Advisor
We believe that financial advisors should be compensated the same way as other professionals, such as CPAs and attorneys. Financial advisors should be paid a fee for specific ongoing services that help an investor achieve his or her financial goals. As always, make sure an advisor will document the services he or she provides in writing.
Be Specific With What You’re Looking For
Did you know that Google uses at least 200 factors when determining how search results are displayed when you type something into a Google search bar? And it’s all to benefit you – Google wants its users to get the best, most appropriate results when using its search algorithms to find information. So make sure you take advantage of this!
When finding a list of financial advisors who best meet your specifications, be specific. Type in everything you want from an advisor. For example, instead of searching for “financial advisor,” try typing in “financial advisor fiduciary estate planning San Antonio.” This way, Google can provide you with a better selection for what you’re looking for.
Paladin Registry also tries to provide the most qualified advisors based on an individual’s needs. Our free match service asks things like:
- What services are you looking for? Planning, such as financial, retirement and estate planning; investing, including asset allocation, manager selection and risk management; insurance, including long-term and annuities; or special situational needs, such as newly widowed or an inheritance?
- What are your preferences? How would you like an advisor to be paid and what credentials would you like an advisor to have?
- What’s your availability? Would you like an advisor to be local, and what times/days are best to be contacted for a pre-screening interview?
This information allows Paladin Registry to produce a list of financial advisors that is better targeted and more beneficial. All advisors profiled in the Registry are financial fiduciaries who are compensated with fees. They have also been through a thorough vetting process.
If you’re looking for a financial advisor for the first time, need to hire a replacement advisor or are a do-it-yourselfer who is looking for professional help, visit the Registry website to see how Paladin can help.
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